Apr 27, 2011

The Best–Practice Engagement Bank

Recently when I posted on reforming customer journeys in the banking space I got some push-back for using Apple as an example of best practice. Surely there are banks I could have used as an example of best practice??? Well… not really. There’s no bank, and believe me I’m looking everyday, that has the whole multi-channel customer experience locked down across the board. So I thought if we could Frankenstein a bank together from banks that are there and are getting certain aspects of the engagement right, it might actually be possible to construct a sort of best-practice bank. Even then, the reality is that there are gaps in what is best-practice because by looking at other industries we find better examples of specific channels than in the banking space.

I realize this is arbitrary and there are probably some other great examples out there. If so, feel free to add those in the comments and if I agree with you I’ll make the appropriate amendments or additions and attribute them to your Twitter ID. Here we go…

Best Branch Experience

What identifies a best-in-class branch experience? Well, the key here is not how sexy the branch looks but whether a branch redesign resulted in a net improvement in customer engagement and in resultant metrics – namely increase in acquisitions and in cross-sell or up-sell. Recently Citi relaunched their “Apple Store” concept branches in both Shanghai and New York, but there is no evidence that plastering tech around your square footage is an immediate guarantee of success. Creating retail spaces that are hi-tech meccas works for Apple because they sell tech, not banking products and services. So what is the goal of the banking space?

Currently there are two goals for branches, the first is to effectively serve transaction or task-focused customers as rapidly and cost-effectively as possible, and the second is to engage the customer around their needs in a friendly and revenue-conducive manner. In respect to the first, it’s my belief that transactions in-branch are fast becoming problematic for most retail banks and the trend is toward strong sales and service over costly transaction handling. This is part of the reason for SNS in Utrect, Netherlands deciding in 2009 to remove cash from their branches, and why others are focusing on strong service centres.

Metro Bank in the UK unquestionably has a very high quality ‘store’ experience (they don’t call their retail points of presence branches), as evidenced by their Net Promoter Score which is higher than any other retail bank in the UK.

We use Net Promoter and currently we have a Net Promoter score of 87% which I believe is among the highest anywhere in the UK — and eight out of 10 of our new customers come as recommendations from existing customers — 97% of our customers rate our service as being exceptional. Anthony Thompson, Chairman and co-founder Metro Bank

Deutsche Bank with their Q110 branch in Berlin and Jyske Bank in Denmark, have taken the retail concept to its ultimate with advisors strolling the store and products bundled in packaging you take off the shelf. The point is that the best branches remove the barriers to engagement with customers, and are not transaction points, but conversation hubs. Some other notable designs are North Shore Credit Union in Vancouver and Che Banca in Italy.

The key here is that the retail space is opened up, barriers to conversations are removed, and a warm space is more inviting, more engaging. Transactions which are a cost to the bank, and are redundant for most customers, are relegated to automated cash and check deposit machines or to digital channels.

Best Online Banking Experience

This is a little tough. Firstly, I don’t believe that public websites and personal internet banking sites should be two separate entities, but the fact is that is the reality for most banks today is that their basic online banking experience hasn’t significantly changed in the last 10 years since the dot com. Awards given by EuroMoney, FT and others for the ‘Best Internet Bank’ or similar, are frankly laughable. Compared with the best online experience in other industries, banks are years behind.

Banks have to start thinking about the online channel as a dialog, as an engagement platform – not a transactional or functional platform. The most basic logic dictates that your secure Internet banking portal should be as much about engagement, service and sales, as it is about transactions. However, the level of complexity of selling and engagement behind the login as an industry is appalling.

So who’s the best? At the moment there’s only one bank I would put even close to living up to the promise of User Experience on this channel, which is Fidor in Germany, but even Fidor doesn’t have the sales experience and recommendation engine capability. Mint, Geezeo, Meniga and others are taking on the PFM battle, to transform the advisory space behind the login. Geezeo has recently launched a referral engine that will enable banks and credit unions to engage customers with smart engagement strategies within the secure internet banking space, but also extending this out to platforms like Facebook and Twitter.

In terms of banks…

It’s very quiet. There’s lots of talk about reinvigorating this space, but the only action on the horizon is our friends at BankSimple.

BankSimple doesn’t look like a traditional Internet Bank, because they understand context.

If you want best practice in online banking, there is not one bank that has this sorted. There is best practice in functionality, there’s some best practice in transactional platforms, bill payment and the like – but there is no bank that provides a model that represents best practice of where banking should be online today from an engagement perspective. Not one.